Sales of previously owned homes rose to an 11-month high in December and the supply of properties on the market dropped to a near 7-year low, an
industry group said on Friday, pointing to a nascent recovery in the housing market.
The National Association of Realtors said existing home sales increased 5 percent month over month to an annual rate of 4.61 million units. November’s sales pace was revised down to a 4.39 million-unit pace, previously reported as a 4.42 million-unit rate.
Economists polled by Reuters had expected sales to rise to a 4.65 million-unit sales pace. Sales in December were up 3.6 percent from a year ago. A total of 4.26 million homes were sold in 2011, up 1.7 percent from the prior year.
The third straight month of gains in sales added to hopes that a tentative recovery in the housing market was starting take shape, but progress will be painfully slow given a glut of unsold properties that is weighing down on prices.
Greece is gearing up for another tough week of negotiations on the country’s crucial second bailout as it tries to revive talks with private investors and has its economy scrutinized by a team of international debt inspectors.
“This is a critical time for the Greek economy … the negotiations are very difficult,” government spokesman Pantelis Kapsis said Monday.
“It is understood that there will be renewed pressure (from the debt inspectors) to speed up structural reforms.”
The mission heads of inspectors from the so-called “troika” _ the International Monetary Fund, European Central Bank and European Commission _ are expected to arrive in Athens on Friday, the Finance Ministry said. The technical teams, meanwhile, will begin work in Athens Tuesday, the same time Horst Reichenbach, the European Commission’s task force chief for Greece, is also due for a four-day visit.
Two top Greek negotiators, public debt management agency head Petros Christodoulou and chief economic adviser George Zanias, were heading to Washington Monday to attend the IMF board meeting on Wednesday, which would be dealing with Greece, the Finance Ministry said.
An integral part of the euro130 billion ($166 billion) second bailout is a bond swap deal with private creditors that is crucial to avoid a devastating default. But those talks appeared close to collapse Friday amid disagreements over the interest rates of the new bonds. The negotiations are expected to resume this week, probably Wednesday.
Known as the Private Sector Involvement, or PSI, the talks aim to reduce Greece’s debt by euro100 billion ($127.8 billion) by swapping private creditors’ bonds with new ones with a 50 percent lower face value. Without it, the country could suffer a catastrophic bankruptcy that would send shock waves through the global economy no teletrack payday loans.
“Despite the difficulties, there is optimism for the outcome” of the second bailout deal, Kapsis said.
Charles Dallara and Jean Lemierre of the Institute of International Finance, a global body representing the private bondholders, met in Athens last week with Prime Minister Lucas Papademos and Finance Minister Evangelos Venizelos, but the talks were suspended on Friday, with the IIF saying that despite Greek efforts, there had not been “a constructive consolidated response by all parties.”
People familiar with the talks said that while a deal appeared close last Thursday, a problem arose Thursday night over the interest rate the new bonds would have, with the International Monetary Fund and Germany seeking a coupon rate below 3 percent _ a very low rate for bonds that are paid off in 20 to 30 years’ time.
The people spoke on condition of anonymity to disclose details of the highly sensitive negotiations.
An interest rate that is that low is unlikely to be accepted by the banks and investment funds holding government bonds _ a crucial issue as the bond swap must be voluntary if the deal is not to be considered a “credit event” that could trigger the payment credit default swaps _ essentially insurance against a default.
Greece is running out of time to clinch a deal, as it faces a massive euro14.5 billion bond redemption on March 20 that it cannot afford to pay.
The second bailout comes on top of a first, euro110 billion rescue package that Greece has been relying on since May 2010, after years of overspending and waste left it facing an untenable public debt.
Germany will keep its AAA rating at Standard & Poor
Asian stocks dropped Monday, ignoring signs of job improvement in the U.S., as traders continued to fret about Europe’s unfolding sovereign debt drama.
South Korea’s Kospi fell 1.2 percent to 1,821.31 and Hong Kong’s Hang Seng index was 0.7 percent lower at 18,463.81. Benchmarks in Singapore, Taiwan and Indonesia also were lower. Mainland Chinese shares rose. In Japan, financial markets were closed for a public holiday.
The U.S. unemployment rate fell in December to 8.5 percent, the lowest level in nearly three years. But signs of strength in the U.S. job market were not enough to offset worries about Europe’s debt problems.
On Friday, Italy’s borrowing costs spiked to dangerously high levels and the euro fell to a 16-month low against the dollar at $1.2696.
Italy is now paying over 7 percent to borrow for 10 years, a sign that investors are concerned the country could default on its debts online payday advance. Many economists believe that those rates are unsustainable over the long term.
Greece, Portugal and Ireland were forced to seek a bailout after their borrowing rates rose above 7 percent.
The euro continued its slide against the dollar. On Monday, it fell to $1.2694 from $1.2724 late Friday in New York. The dollar fell to 76.92 yen from 77.02 yen.
In energy trading, benchmark crude for February delivery fell 45 cents to $101.11 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 25 cents to settle at $101.56 in New York on Friday.
Chinese Premier Wen Jiabao said business conditions may be
Germany and France send two key government officials to fill positions at the European Central Bank today, setting off a struggle for the job of chief economist.
Joerg Asmussen and Benoit Coeure join the ECB
President Barack Obama, saying he
Spanish Prime Minister Mariano Rajoy announced 14.9 billion euros ($19.3 billion) of deficit cuts, with the government
Prime Minister Manmohan Singh failed to win passage of his anti-corruption bill as an uproar broke out in India
Taiwan President Ma Ying-jeou said his rapprochement with China will encourage other nations to strengthen trade with the island and make it less dependent on the mainland, rebutting opposition criticism that he
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